Nigeria

NPA boss, Hadiza Bala-Usman in fraud scandal

How financial recklessness was discovered

The Managing Director of the Nigerian Ports Authority, Hadiza Bala-Usman has been indicted of financial recklessness by an audit report conducted by the Auditor-General’s office., an online medium Persecond news reports.

Part of the recommendations include that the Bala-Usman-led NPA should refund about N5.18 billion to the Federation Account for various unreconciled transactions.

Investigation shows how spending under Hadiza Usman keeps rising even as the NPA flunks its audit.

The fraud which runs into billions of naira was uncovered by an ‘audit query’ of activities of the NPA between 2016 and 2018, Per Second News gathered.

The Auditor General’s Office concluded, however, that the NPA’s financial records were riddled with so many bookkeeping deficiencies, irregularities, and errors that a reliable audit was simply impossible.

The office of the Auditor General of the Federation also came hard on the NPA boss for gross “betrayal of public trust” as demonstrated by her flagrant abuse for due process in the way and manner she runs the agency, citing documents obtained by this newspaper.

Highlights of the damning report from the office of the Auditor General of the Federation include her refusal to remit VAT deductions running into billions of naira and in foreign currency denomination to the Federal Inland Revenue Service.

For instance, the query highlighted unremitted deduction to Federal Inland Revenue Service (FIRS) to include N3,667,750,470. $148,845,745.04, Euro 4,891,449.50 and £252,682.14.

The NPA under Hadiza Bala Usman was also accused of” excessive increase in administrative operational expenses” extra budgetary expenditures on hotel accommodation and under disclosure of expenditures on hotel expenses”, Corporate social Responsibility Projects, diversion of funds through the Nigerian Port Today, to the sponsorship of National Assembly Programmes, amongst other.

The queries which covered over 100 issues, also asked Hadiza Bala Usman to make various refunds to government, especially in instances where such expenditures could not be justified.

Investigation also uncovers that the Audit team reviewed NPA’s policy on implementation of Corporate Social Responsibility Projects/ Programmes and discovered that records relating to CSR fell short of the level of compliance with the Public procurement Act 2007.

In 2016, the NPA spent N286,412,628.00 on CSR while in 2017, the figure rose to N2,496,248,775.00 and N5billion in 2018. The Audit team found out that “beneficiary needs were not properly assessed or identified before the implementation of CSR projects/ programmes.

The Audit team observed to its chagrin that there was no evidence of compliance with public procurement Act and that most of the CSR projects/ programmes were inflated and accordingly ordered that the “sum of N5.18 billion should be recovered from the Managing Director of NPA, being the value of, inflated amount under her watch.

The committee also observed that delivery of CSR items were not accompanied with delivery letters and that in most cases, there was no evidence of actual items delivered and who signed for them.

The medium gathered that the NPA boss and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the government and drive the NPA’s budgets ever higher, regardless of port necessity.

The NPA has literally been making up numbers in its annual financial reports to the National Assembly—representing billions of dollars’ worth of seemingly nonexistent transactions—knowing that the National Assembly would rely on those misleading reports when deciding how much money to give the Authority.

The fraud works like this, for instance while a contract with Ref. HQ/GM/PROC/CON/C.11/PBT/16/322 dated 16/10/17 was awarded in favour of Messrs Ecomaxx Engineering Projects Ltd for the supply of items to the old people’s Home Yaba, Lagos to the tune of N19,760,460.00 which was paid vide invoice no HQ/CS/0711 dated 01/06/17 there was no documentary evidence that the items were indeed delivered to the Home.

In the same vein, the contract for supply of items to Yaba children’s orphanage followed the same pattern.

For instance, whilst a contract awarded in favour of Trans-secure Ltd was N19,467,000.00 the survey conducted by the audit team found out that N6,520,500.00 was the actual market price. This NPA expenditure fraud is déjà vu all over again for Spinney, prompting the office of the AGuF to demand an explanation from Hadiza Bala Usman reasons for the sharp excessive increase in the Authority’s expenditure profile between 2016 and 2018. “It was observed that total expenditure by the Authority increased astronomically by 128% from N87.47 billion in 2016 to N198.98 billion in 2017. Of particular concern was the administrative expenses which increased by 72% from N26.126 billion in 2016 to N44.93 billion in 2017.

Among the laundering tactics uncovered by the Audit Query revealed that whereas in 2016 N22.16 billion was expended on revenue monitoring, the amount rose to a whopping N1.06 billion in 2017, an increase of over 4,689%. Similarly, overseas training rose from N20.48 million in 2016 to N470 million, an increase of over 2194%.

Also, whereas N15.31 million was spent on vessels / craft in 2016, the amount rose to N117.4 million in 2017, an increase of 666%.

The excessive expenditure of pollution control also attracted the scrutiny of the auditors who insisted that Hadiza Bala Usman must tell Nigerians why and how N4.2 billion was spent in 2017 as against N29 million in 2016, an increase of 14,310 %. Other over bloated increase in expenditure include local and foreign medical expenses, legal fees, Corporate souvenirs and expenditure on other government agencies which rose from N50.29 million in 2016 to N338.59 million in 2017, a 573 per cent rise.

The Audit also raised its yellow flag on an alleged “diversion of N369.71 million through the Nigerian Ports Today” the official in-house magazine of the NPA. “Payments to Nigerian Ports Today were reviewed to confirm whether they were properly initiated, authorised processed, documented and paid in line with the Public procurement Act 2007,”the report said.

However “findings revealed the sum of N369,718,130.82 was paid to Nigerian Ports Today, a Limited liability company that is fully owned and controlled by NPA during the period under review. There was no evidence of contractual relationship in the form of award of contract to the company nor was there anything to show the company rendered services to the Authority to justify these payments and concludes that the Authority paid the company without a contract and thereby contravening the Public procurement Act 2007, and that this was viewed as a means to divert public funds,” the report alleged.

The Audit query also took serious exceptions to various expenditure incurred by the NPA on behalf of the Minister of Transportation, Rotimi Amaechi for which a whopping $604,598.95 was paid without supporting documents .

Hadiza Bala Usman was asked to refund the said sum into government treasury. Usually dependable source at the office of the Audit General of the Federation told Shipping World that the Audit queries cuts across all units and departments of the agency and that massive over invoicing and flagrant disregard for due process were uncovered. In all, at least a mind-boggling N20 billion of NPA’s financial transactions between 2016 and 2018 could not be traced, documented, or explained

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